LinuxWorld Expo Recap

A preview and summary of the February 8 episode of Phil Hughes' weekly radio show featured on Biz Soup.

LinuxWorld Expo was the big event of the week of January 30 through February 5. The show was big, but the announcements were even bigger. In this week's program, I will be talking about the announcements and other happenings and what they mean to the Linux community.

The biggest announcement was VA Linux Systems' purchase of While we were expecting this, it seems to have come as a surprise to a lot of the world. Does it make sense? Yes, although there needs to be more.

After VA's big IPO last year, their stock has been dropping from a high of 320 right after the IPO in December to a low of 105-1/2 last month. A market capitalization in the billions (between $5 and $15 billion, depending on when you looked at it) just doesn't make long-term sense for a company that had $30 million in sales last year. The trick is to take some of that extra money, and go buy someone (or something) that helps make you look bigger.

Andover can offer the first step for VA. Their purchase of and other web sites offers them a lot of web traffic and has made them well-known among Linux geeks. While there is little financial data available about them yet, in the fourth quarter of calendar year 1999 they had about $2 million in revenues and $15 million in losses. While this doesn't sound like a good buy, it makes sense because the Andover web sites will offer the traffic VA needs.

But, I think it isn't enough. VA needs two more things: a service organization and a revenue stream that is significant and, in addition, one that doesn't come from selling hardware. There were VA/LinuxCare rumors for a while, but with LinuxCare doing their own IPO, that seems unlikely. My guess (I suppose you could call it the rumor I am starting) is that a VA/Corel deal is in the works. It makes a lot of sense, considering Corel is firmly into the Linux space, just announced their professional services program and has sales of $234 million.

In other happenings at the show, Applix announced a new version of Applixware Office, Atipa announced it had acquired Enhanced Software Technologies and Yodlee selected VA Linux Systems for its application servers.

There is more to come. Tune in on Tuesday for details.


Phil Hughes

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